9 steps towards hassle-free GST implementation


Here are the top 9 steps for GST implementation that every business should follow:-

Step-1   Registration :-

Every business carrying out a taxable supply of goods or services under GST regime and whose turnover exceeds the threshold limit which can be known in GST guidelines, if you are applicable you will be required to register as a normal taxable person. This process is of registration is referred as GST registration.

Now that we know who needs to register, the question arises that are there any benefits for registration? GST registration is critical because it will enable you to avail various benefits that are available under the GST regime. One such benefit is to avail seamless input tax credit. Multiple taxes are being clubbed under GST and thus the cascading of taxes that is prevailing currently will no longer be the case. Also, timely registration will help you avoid any kind of interface with tax authorities.

Step-2   Organization realignment:–

 GST is going to affect each business in one way or other, so a proper information should be found out about the supply chain of the organization i.e. which area will be most affected by GST and which area will be least affected and according to this proper organization realignment should be done.

Step-3   Alignment of invoicing :–

 We know how important invoices are , there importance will increase after the implementation of GST , A tax invoice is an essential evidence to:

  • support a registered person’s claim for the ITC of GST (input tax) incurred;
  • trigger the time of supply as the invoice date will determine when GST is to be accounted for by a registered person on the supply of goods and services (accounting on invoice basis);

now there are certain guidelines that needs to be followed when making this invoices. To know format of tax invoice please refer article “GST tax invoice”

other invoices like debit, credit notes and other accounting formats should also be aligned according to GST requirements.

Step- 4   IT systems:

with GST comes a large number of challenges for various organization like detail record keeping has become necessary, input credit rules are complicated, large number of compliances ,the cost of compliance is too high for the whole supply chain , a good IT infrastructure can help the organizations in tackling this challenges hence an updated IT system should be put into place before GST. To know various ways in which IT can help during GST implementations please read the article”Do you need IT system for GST?

Step-5   Update GSTIN to your trade network :-

 GST registration is required to be obtained for each state from where taxable supplies are being made. Each taxpayer will be allotted a State wise PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN). This number will serves as an identification prove for businesses and have to used while making invoices, hence GSTIN  of both vendors and customers have should be found out to make invoices therefore it is necessary for businesses to update GSTIN to Vendors and customers which will be different in different states. Get your hands on a free software to share GSTIN here.

Step-6     Input tax credit arrangement:

A taxable person can accumulate credits of taxes paid and carry them forward in a return. With the introduction of the GST, the last set of credits will have to be transferred. To do this, you must furnish proof of his/her last return filed under the old regime. You will, therefore, need to make sure that all input taxes paid are included in it; by doing so, you will be claiming the credit of the same under the new regime.

For example, let’s consider July 1, 2017 as the appointed day for the GST rollout. The taxpayer must make sure that he/she has taken into account all the stock lying on June 30, 2017 and claim input credit during the filing of returns for the period ending June 30, 2017. The taxpayer, thus, must ensure that all such goods and services are eligible for such a credit under the new GST law.

Step-7    Understanding various GST tools and its working :-

 When GST rolls out, each registered taxpayer will get a profile created on the government’s GST website. The taxpayer using the login credentials will be able to access all features along with a dashboard. All the taxpayers will also get three electronic ledgers namely E-cash Ledger, E-credit Ledger & E-liability Ledger. These ledgers will reflect the amount of tax payable, input credit balance, and on adding money to the cash ledger the taxpayer will also be able to settle the tax liability online.

Step-8    Monitor progress and keep your employees informed:-

Getting ready for GST compliance is a huge challenge. Companies need to keep on monitoring their progress from time to time so as not to fall back. For this proper flow of information is required as fast information about status can make you make right decisions at right time.

As companies take steps to get ready for GST compliance, they may  encounter disruption of internal processes. They need to take their employees into confidence and explain that this is just a transition phase and soon they will get used to this, and things will fall into place.

Step-9   Review and validate results:-

  GST is much more stringent than our old taxation system hence even when it seems that your organization is completely prepared for GST reviewing the rules and your preparedness for GST posses no harm. Keep reviewing may result in detection of some error which can cause the company to dodge many difficulties in the future. Hence reviewing and validating the results will be an important step for hassle free GST implementation.

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